The Smartphone market is growing at rapidly and now almost 50% of the mobiles in US are smartphones.
The chart by Asymco below shows the trends in profit shared by each of the major players in the mobile phone market.
Apple is the winner with 73% of the share of profits in the mobile phone sector. While all the traditional mobile phone makers like Nokia, Motorola, LG, RIM (blackberry maker) have reported losses. HTC has reported profits and they account for only 1% of the entire profits in the industry.
Samsung has the second biggest share of profits with 26% of the total. Now, we understand why Samsung is touted to be the “rival” to Apple.
Nokia has had a profit share of almost 60% in 2007 is now reporting losses. The main reason being the smartphone revolution.
On the whole, Apple + Samsung together take the entire pie of profits in the mobile phone market.
So, this brings us two major questions :
Can Samsung really beat Apple in the profit share ?
This is something which cannot be said for sure right now. But Samsung seems to be growing rapidly too.
The way Samsung has unveiled its flagship Galaxy S III smartphone shows that it has struck the right chord in marketing the highly hyped and talked about phone. Samsung seems to be inspired by Apple which generally holds separate events to launch its products. This might be the reason the Galaxy SIII was not shown during the mobile world congress 2012.
Is Nokia going to survive ?
Low end Android smartphones have started replacing Nokia’s S40 feature phone volumes.
Nokia is one of the biggest sellers of low end feature phones. But now, it is facing competition from small and other Chinese phone manufacturers in this sector. So, even at this end, Nokia has challenges to face.
If we carefully observe the above chart, the number of units sold per quarter in feature phone segment seems to be almost the same as that in 2008. This is once again because of the so-called smartphone revolution. With the low end phone market almost saturated, Nokia might also have to look seriously at the high end smartphone segment.
This article on WSJ, also asserts that Nokia needs a game changer for it sustain in this highly competitive mobile phone sector. Will Microsoft be the game changer for Nokia ?